A Golden Fork

What do Bitcoin and Gold have in common? They are both assets. Both have limited supply that grows only slowly. Both can be seen as a form of money since they are stores of value and can be used as a medium of exchange. Both are liquid and divisible, although Bitcoin is much more easily divided. And both are unlike fiat money, in that they are debt-free. Both are ‘mined’, gold is physically mined, and Bitcoin is ‘mined’ via cryptographic hash algorithms (proof of work).

But what is Bitcoin Gold? It is neither gold, nor the current Bitcoin. Rather it is a proposed fork of Bitcoin, designed to make mining easier, and accessible to more people. And it could happen very soon, just three weeks from now.

The chief backer is CEO of a Hong Kong-based company, Jack Liao, and he indicates the motivation behind Bitcoin Gold is for it to be complementary to Bitcoin and to grow the community of miners, to allow the Bitcoin ecosystem to move away from its present centralization in a few mining pools.

It is not clear how well the proposal has been developed, and how many miners, current or new, will back it. But the intent is to allow mining by GPUs, rather than the specialized ASICs highly optimized for the SHA-256 hashing used by both Bitcoin and Bitcoin Cash.

Instead it will use the Equihash algorithm, that is GPU-friendly rather than ASIC-friendly, since it demands substantial utilization of memory and memory bandwidth. This could allow for a much broader community of miners since GPUs from Nvidia and AMD are so widely deployed.

The primary cryptocurrency usage of GPUs today is for mining Ethereum. But since Ethereum is scheduled to move away from proof of work and to adopt proof of stake next year, Bitcoin Gold could be the most important new target for GPU-based mining.

The developers of Bitcoin Gold intend to remain aligned with Core and Segwit roadmaps.

Everyone holding Bitcoin, with a suitable private wallet at the beginning of August, received a ‘free’ dividend of Bitcoin Cash. The major exchanges ended up supporting access to users’ Bitcoin Cash, some sooner, others later. Now everyone holding Bitcoin with a suitable private wallet on October 25th stands to receive a free dividend of Bitcoin Gold (BTG) as well.